Okeanis Eco Tankers Corp. – New Financing Update
Okeanis Eco Tankers Corp. (NYSE:ECO / OSE:OET) has secured a new $31.11 million senior secured credit facility from Bank SinoPac Co., to finance the repurchase of its Suezmax vessel Poliegos. The financing deal, expected to close in July 2024, carries an interest rate of Term SOFR plus 160 basis points, matures in six years, and includes quarterly repayments of $0.78 million and a balloon payment of $12.44 million at maturity. CFO Iraklis Sbarounis highlighted the transaction as a strategic move to improve the company's capital structure, noting a significant reduction in financing costs and access to new Asian markets. Since June 2023, Okeanis has refinanced its fleet, reducing banking debt costs by 125 basis points on over $550 million in principal and extending maturities to between 2028 and 2031. The company aims to continue optimizing financing for its vessels, including the Nissos Rhenia and Nissos Despotiko, by 2026.
- Okeanis secured a $31.11 million senior secured credit facility.
- The new facility has an interest rate of Term SOFR plus 160 basis points.
- Quarterly installments are approximately $0.78 million.
- The balloon payment at maturity is approximately $12.44 million.
- The financing is expected to close in July 2024.
- Okeanis has reduced banking debt costs by 125 basis points since June 2023.
- The company has refinanced over $550 million in principal.
- Maturities have been extended to between 2028 and 2031.
- The company has entered new Asian financing markets.
- None.
Okeanis Eco Tankers Corp. announced a new $31.11 million credit facility to finance the purchase of the Suezmax vessel Poliegos. This represents a strategic financial maneuver. The new facility, provided by Bank SinoPac Co., Ltd, offers a favorable interest rate of Term SOFR plus 160 basis points. The move signifies a shift from the previous sale and leaseback financing, potentially reducing costs substantially.
Short-term impact: The interest rate reduction and terms could result in lower financing costs, enhancing profitability. Investors might see this as a positive given the reduced interest expenses and improved cash flows.
Long-term implications: The six-year maturity with quarterly installments and a balloon payment introduces a manageable repayment structure that could benefit the company’s long-term capital management strategy. It demonstrates the company’s ability to diversify its financing sources, which is important amid the Basel IV banking reforms.
The broader refinancing of the fleet, reducing the weighted average pricing by 125 basis points, indicates shrewd financial management. This is noteworthy as it aligns with the recent shift from LIBOR to SOFR, potentially averting future volatility associated with interest rate changes.
Okeanis Eco Tankers Corp. strategically tapping into the Asian financing markets is an astute move considering the tightening regulations under Basel IV. Diversified financing sources ensure better resilience against market fluctuations and regulatory changes. With the successful refinancing of the fleet, excluding two VLCC vessels, the company shows robustness in navigating the evolving financial landscape.
Industry context: The tanker market has been subjected to volatility due to global economic shifts and regulatory changes. By securing more favorable terms and extending debt maturities, Okeanis Eco Tankers can better withstand market downturns and maintain operational stability. This positions the company favorably in the competitive tanker market.
Investor perspective: The certainty and flexibility provided by the new financing terms are likely to be viewed positively. Investors can interpret these moves as a sign of strong financial health and strategic foresight, potentially boosting confidence in the company's management and long-term prospects.
ATHENS, Greece, June 20, 2024 (GLOBE NEWSWIRE) -- Okeanis Eco Tankers Corp. (“we”, the “Company”, “OET” or “Okeanis”) (NYSE:ECO / OSE:OET) is pleased to announce the following financing update relating to its fleet.
On June 20, 2024, we entered into a new
Iraklis Sbarounis, CFO of the Company, commented:
“We are very pleased to announce this transaction that marks an important milestone in our continuous efforts to improve our capital structure, with a significant reduction in pricing compared to the vessel’s previous sale and leaseback financing.
We have strategically targeted setting foot in this new financing market and are satisfied to enter into our first transaction. We believe it may open new opportunities for us in the future, and adds diversity and flexibility to our debt financing options, especially considering the challenges that may start affecting part of the more traditional ship financing markets due to the implementation of the Basel IV banking reforms. We have strong relationships with and access to multiple Asian financing markets that we believe tactically and effectively complement our mix of financiers.
Since June 2023, we have refinanced our entire fleet, except for our two VLCC vessels that are financed through sale and leaseback facilities and whose purchase options are not initially exercisable by us until the first half of 2026. With respect to the remaining twelve vessels that have been refinanced, we have significantly improved pricing, extended maturities, added flexibility, and accessed new financing markets. Indicatively (and also taking into account the transition of the benchmark interest rate from LIBOR to SOFR in 2023), we have reduced the applicable pricing on our banking debt on these vessels (the principal of which is more than
We look forward to continuing working with our financiers to source the best refinancing options for the Nissos Rhenia and the Nissos Despotiko in 2026, or if the opportunity arises for other accretive deals.”
Contacts
Company:
Iraklis Sbarounis, CFO
Tel: +30 210 480 4200
ir@okeanisecotankers.com
Investor Relations / Media Contact:
Nicolas Bornozis, President
Capital Link, Inc.
230 Park Avenue, Suite 1540, New York, N.Y. 10169
Tel: +1 (212) 661-7566
okeanisecotankers@capitallink.com
This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.
About OET
OET is a leading international tanker company providing seaborne transportation of crude oil and refined products. The Company was incorporated on April 30, 2018 under the laws of the Republic of the Marshall Islands and is listed on Oslo Børs under the symbol OET and the New York Stock Exchange under the symbol ECO. The sailing fleet consists of six modern scrubber-fitted Suezmax tankers and eight modern scrubber-fitted VLCC tankers.
Forward-Looking Statements
This communication contains “forward-looking statements”, including as defined under U.S. federal securities laws. Forward-looking statements provide the Company’s current expectations or forecasts of future events. Forward-looking statements include statements about the Company’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or conditions. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “hope,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. The Company’s actual results could differ materially from those anticipated in forward-looking statements for many reasons, including as described in the Company’s filings with the U.S. Securities and Exchange Commission. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Factors that could cause actual results to differ materially include, but are not limited to, the Company's operating or financial results; the Company's liquidity, including its ability to service its indebtedness; competitive factors in the market in which the Company operates; shipping industry trends, including charter rates, vessel values and factors affecting vessel supply and demand; future, pending or recent acquisitions and dispositions, business strategy, areas of possible expansion or contraction, and expected capital spending or operating expenses; risks associated with operations; broader market impacts arising from war (or threatened war) or international hostilities; risks associated with pandemics (including COVID-19), including effects on demand for oil and other products transported by tankers and the transportation thereof; and other factors listed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. Except to the extent required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. You should, however, review the factors and risks the Company describes in the reports it files and furnishes from time to time with the U.S. Securities and Exchange Commission, which can be obtained free of charge on the U.S. Securities and Exchange Commission’s website at www.sec.gov.
FAQ
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